A Project on,

Employees State Insurance Act

Project compiled By,

Farheen Khan 13 Manisha Jadhav Srishti Kumar Nafisa Shaikh Prerna

Introduction
ESI started in India in 1948, initially for factory workers. provides social security to employees from all industries, covering 12.5 million employees working with about 400,000 employers.

Following the promulgation of the ESI Act the Central Government set up the ESI Corporation to administer the Scheme, The Scheme thereafter was first implemented at Kanpur and Delhi on 24th February 1952. The Act further absolved the employers of their obligations under the Maternity Benefit Act, 1961 and Workmen's Compensation Act 1923.

Objective
The ESI Act is a social welfare legislation enacted with the object of providing certain benefits to employees in case of sickness, maternity and employment injury. Under the Act, employees will receive medical relief, cash benefits, maternity benefits, pension to dependents of deceased workers and compensation for fatal or other injuries and diseases.

What is ESI Scheme?

in the Employees State Insurance Act against the hazards of sickness, maternity, disablement and death due to employment injury and to provide medical care to insured persons and their families.

The First ESIC Day

Every year the ESIC Day is celebrated on 24 February in all the establis-hments of the Corporation throughout the country. On this day in the year1952, the then Prime Minister Pandit Jawahar Lal Nehru inaugurated the ESI Scheme at Kanpur.

Shri Jawahar lal Nehru, the First Prime Minister of India on his visit to Regional Office prior to the Inaugural Function on 24th February, 1952

Declaration form signed by the first Honorary Insured Person

Applicability of the Act

All factories

Shops employing 20 or more persons.

Such other Govt. specified establishments.

Act does not apply to

The act does not apply to any member of Indian Naval, Military or Air Forces
Seasonal factories engaged exclusively in any of the activities like: cotton ginning, cotton or jute pressing, decoration of ground nuts, manufacturing coffee, indigo, lac, rubber, sugar, or tea or any manufacturing process incidental to or connected with any of the afore said activities, and including factories engaged for a period not exceeding seven months in a year in blending, packing or repackaging tea or coffee, or in such other processes as may be specified by the central govt. The factories exempted as seasonal from the provisions of the act. Mines Railway running sheds Govt. factories or establishments and Indian naval, military, or air force Other Govt. notified exempted establishments

ACT AUTHORISATION To Promote and measure for health and welfare of INSURED EMPLOYEES. Intervene for the rehabilitation and re-employment for disabled / injured To appoint inspectors for purposed of the act To determine the amount of contribution and relevant verification

Eligibility
Any person employed for wages (up to Rs. 6,500) in or in connection with the work of a factory or establishment end.

Any person who is directly employed by the employer in a factory or through his agent on work which is ordinarily part of the work of the factory or incidental to purpose of the factory.

Contribution
It is the principle employers responsibility to deposit his own as well as employees contribution in respect of all employees including the contract labor, into the E.S.I. Account. Non-availability of funds cannot be a ground for non-payment of contributions under the act. There is no provision to waive the contribution, damages and interest
The employer is required to contribute at the rate of 4.75% of the wages paid/ payable in respect of every wage period. The employees are also required to contribute at the rate of 1.75% of their wages except when the average daily wages in a wage period are equal to or less than Rs.40. The employer should get his factory or establishments registered with the E.S.I. Corporation within 15 days after the Act becoming applicable to it, and obtain the employers Code Number. The regional officer will allot a code number to the employer, which must be quoted in all documents and correspondence.

Contribution Period & Cash Benefit Period

Contribution Period 1st April to 30th Sept. 1st January of the following year to 30th June.

Cash Benefit Period 1st Oct. to 31st March 1st July to 31st December of the year following

ESI Scheme includes Coverage Administration Finance Contribution Benefits

Coverage under the ESI Act, 1948

The ESI Act extends to the whole of India.

It applies to all the factories including Government factories (excluding seasonal factories), which employ 10 or more employees and carry on a manufacturing process with the aid of power and 20 employees where manufacturing process is carried out without the aid of power. The act also applies to shops and establishments.
All employees including casual, temporary or contract employees drawing wages less than Rs 10,000 per month are covered.

Coverage(As on 31st March, 2011)

Coverage(As on 31st March, 2011)

1
2 3 4 5

No. of Insured Person family units

No. of Employees Total No. of Beneficiaries No. of Insured women No. of Employers, etc

1.55 Crores
1.54 Crores 6.02 Crores 0.25 Crores 4.43 Lacs

Administration
The comprehensive and multi-pronged social security programme is administered by an apex corporate body called theEmployees' State Insurance Corporation. It comprises members representing vital interest groups, including, employees, employers, the Central and State Government, representatives of Parliament and medical profession. The Corporation is headed by the Union Minister of Labour, as its Chairman, whereas the Director General, appointed by the Central Government functions as its Chief Executive Officer. The broad based corporate body is, primarily, responsible for coordinated policy planning and decision making for growth, development and efficacy of the scheme. A Standing Committee, constituted from among the members of the Corporation, acts as an Executive Body. The Corporation, with its Central Headquarters at New Delhi, operates through a network of 52 Regional, Sub- Regional and Divisional Offices located in various States. The administration of Medical Benefit is taken care of by the respective State Government except in case of Delhi and Noida/Greater Noida area in Uttar Pradesh where the Corporation administers medical facilities directly. States for developing them as ESIC Model Hospitals.

Finance
ESI Scheme, like most of the Social Security Schemes the world over, is a self financing health insurance scheme. Contributions are raised from covered employees and their employers as a fixed percentage of wages. As of now, covered employees contribute 1.75% of the wages, whereas, the employers contribute 4.75% of the wages, payable to their employees. Employees earning upto Rs.100/- a day are exempted from payment of their share of contribution. The State Governments, as per provisions of the Act, contribute 1/8th of the expenditure of medical benefit within a per capita ceiling of Rs. 1200/- per Insured Person per annum. Any additional expenditure incurred by the State Governments, over and above the ceiling and not falling within the shareable pool, is borne by the State Governments concerned.

Benefits under the Act

The benefits are provided under section 46.
Medical

Other Benefits

Sickness

Benefits
Depende nts Disablem ent

Maternity

Medical Benefit An insured person or a member of his family whose condition requires medical treatment and attendance entitled to receive medical benefit. Rs.250 on account of confinement expenses shall be paid to an insured person or his wife if confinement occurs at a place where necessary medical facilities under E.S.i.C. schemes are not available. Employer not to dismiss or punish employee during period of sicknesssection73.

Sickness benefit Every insured employee is entitled to the cash benefit for the period of sickness certified by a duly appointed medical practitioner if the contributions in respect of him were payable for not less than 78 days in the corresponding contribution period. Cash benefit takes the form of periodical payment made to an insured person which is payable for maximum numbers of 91 days in any two consecutive benefit periods. The benefit is not paid for the first two days of sickness which is treated as the waiting period. Insured persons suffering from long term diseases like T.B., leprosy, mental, heart etc. and who have been continuous employment for two years are entitled to get sickness benefit period up to 309 days.

Enhanced Sickness Benefit payable at 100% of standard benefit rate, i.e. at full average daily wage is also provided to insured persons eligible to ordinary sickness benefit, for undergoing sterilization operations for family planning, for up to 7 days in case of vasectomy and up to 14 days for tubectomy, the period being extendable in cases of post-operative complication, etc.

What is Extended Sickness Benefit? Extended Sickness Benefit is a Cash Benefit paid for prolonged illness due to any of the 34 specified diseases as mentioned below.

Maternity benefit A periodical cash benefit is payable to an insured woman employee, in cash of confinement, miscarriage, medical termination of pregnancy, premature birth of a child or sickness arising from pregnancy etc. If the contributions in respect of her were payable for at least 70days in the two immediately preceding contribution periods The benefit is payable of twice the standard benefit rate or Rs.20, whichever is higher for all days on which she does not work during the prescribed period.

Disablement Benefit

Disablement Benefit

Temporary Disablement Benefit

Permanent Disablement Benefit

Disablement Benefit

It is payable to an employee who is injured in the course of his employment and is permanently or temporarily disabled or contacts any occupational disease.

Temporary disablement benefit (TDB) : From day one of entering insurable employment & irrespective of having paid any contribution in case of employment injury. Temporary Disablement Benefit at the rate of 90% of wage is payable so long as disability continues. Permanent disablement benefit (PDB) : The benefit is paid at the rate of 90% of wage in the form of monthly payment depending upon the extent of loss of earning capacity as certified by a Medical Board

Dependents benefit

If any employee dies during any period for which he is entitled to a cash benefit, the amount of such benefit shall be payable up to & including the day of his death. The amount of benefit shall be paid to the nominee or, where there is no nomination, to the heir or legal representative of the deceased employee.

Other Benefits

In addition, the scheme also provides some other need based benefits to insured workers. These include;
Funeral expenses Rehabilitation allowance Vocational Rehabilitation Old age Medicare Medical Bonus / Confinement Allowance Rajib Gandhi Shramik Kalyan Yojna

Funeral Expenses Funeral expenses are in the nature of lump sum payment up to a maximum of Rs.10, 000 w.e.f. 01-04-2011 made to defray the expendi ture on the funeral of a deceased insured person. The amount is paid either to the eldest surviving member of the family or, in his absence, to the person who actually incurs the expenditure on the funeral. Rehabilitation Allowance The Corporation vide its Resolution dated 22-12-1979 has decided to grant Rehabilitation Allowance to the insured persons for each day on which they remain admitted in an Artificial limb centre on the rates, which is equal to the Standard Benefit rate. The above benefit was introduced with effect from 01-01-1980.
Vocational Rehabilitations

The vocational rehabilitation scheme is admissible in the case of Disabled and unemployed Insured Persons under 45 yrs. of age with 40% or more disablement. The scheme involves for training in the field of Radio/T.V. assembly, commercial training (typing/shorthand), metal work, carpentry, came work and tailoring etc.

Confinement Allowance
Confinement Allowance @ Rs.2, 500 is paid to an insured woman or in respect of the wife of an insured person in cases where the medical facilities under the ESI Scheme are not available at that place.
Unemployment Allowance named as Rajib Gandhi Shramik Kalyan Yojana Rajiv Gandhi Shramik Kalyan Yojana- Procedure

The E.S.I. Corporation has decided to provide Unemployment Allowance to the Insured Persons who have been rendered unemployed involuntarily due to closure of the factory/establishment retrenchment or permanent invalidity arising out of non-employment injury. The scheme has been named as Rajiv Gandhi Shramik Kalyan yojana. It shall apply to an Insured Person who becomes unemployed on or after 1ST April, 2005.

AREAS COVERED

The ESI Scheme is being implemented area-wise by stages. The Scheme has already been implemented in different areas in the following States/Union Territories of Indian Union.
STATES All the States except Manipur, Sikkim, Arunachal Pradesh and Mizoram. UNION TERRITORIES Delhi and Chandigarh
Coverage(As on 31st March, 2011) No. of Insured Person family units No. of Employees 1.55 Crores 1.54 Crores

Total No. of Beneficiaries

No. of Insured women No. of Employers, etc

6.02 Crores
0.25 Crores 4.43 Lacs

Registration

Registration is the process by which every employer/factory and its every employee employed for wages, is identified for the purpose of the Scheme, and their individual records are set up for them.
What is an Identity Card?

On registration every insured person is provided with a Temporary Identification Certificate which is valid ordinarily for a period of 3 months but may be extended, if necessary, for a further period of 3 months. Within this period, the Insured Person is given a permanent family photo Identity Card in exchange for the Certificate. EMPLOYERS CAN NOW SUBMIT APPLICATION ONLINE FOR REGISTRATION UNDER ESI ACT THROUGHhttp://www.esic.in/

Offences and penalties

Offences and penalties

Punishment for false statement:- In this case any false statement or false representation, shall be punishable with imprisonment up to Rs.2000 or with both Punishment for failure to pay contributions:- if any person fails to pay any contribution which under to this act he is liable to pay, he shall be punishable with imprisonment up to three years. Punishment for other contravention:- in contraventions like dismisses, discharges, reduces or otherwise punishes an employee, shall be punishable with imprisonment up to one year or with fine up to Rs.4000 or with both